1. QuickBooks for Farmers Part 3 Presented by: Julia Shanks Food Consulting With the Carrot Project www.JuliaShanks.com www.thecarrotproject.org

2. Disclaimers The examples shown are for QB Desktop for PC 2014 ▫The interface for the on-line version and MAC are different ▫The on-line version is not quite as robust ▫The functions are the same, where you find them and how they look will be different The numbers in this presentation are fictitious and used for illustrative purposes only. As you set up your own QuickBooks files, you will need to adjustments based on your own business and growth needs.

3. Agenda Goals Tracking ▫Refine Data Entry Getting it Right ▫Year End Adjustments Reports ▫Profit and Loss ▫Balance Sheet ▫Time Creating Projections

4. Develop Building Blocks Understand Basic Accounting Develop Systems for Tracking your finances Track and Measure your progress Plan for growth and profit Accounting For Farmers Part I QuickBooks Webinars Part I & II Accounting For Farmers Part II We Are Here!

5. Goals for QuickBooks Data Insight Action! Data -Effective systems for tracking revenue, expenses, and balance sheet changes Insight -Running reports -Knowing where to look for information Action! -Make adjustments to business -Plan for Growth -Apply for loans/grants Get the insight you need to make effective management decisions.

6. Goals for this Webinar Data Insight Action! Data -Tips and tricks to ensure effective data entry -Fixing transgressions Insight: Reports: -Profit and Loss -Balance Sheet -Time Summary Action! -Create Projections -Prepare for Loans

8. Creating Your Chart of Accounts REVENUES EXPENSES Sales Channels ▫Farmers Markets ▫Farm Stand ▫Co-Op ▫CSA ▫Wholesale OR Products ▫Beef ▫Dairy ▫Vegetables Parent Categories ▫COGS ▫Direct Operating ▫Payroll ▫General + Admin ▫Repairs + Maintenance ▫Occupancy Children (Sub-Accounts) ▫Seeds/Seedling ▫Fertilizers/Amendments ▫Salaries and Wages ▫Insurance

9. Income Statement – Keeping it Clean Above “The Line”Below “The Line” Sales Revenue Direct Operating Expenses Payroll Repairs and Maintenance General & Admin Occupancy Off-farm income Grants Secondary Revenue Interest Expense Owners’ draw (personal expenses) Depreciation expense Secondary expenses QB Account Types: Income Expenses COGS QB Account Types: Other Income Other Expenses

10. Tracking Time & Items

11. Tracking Time Items: Jobs or Chores ▫Planting ▫Harvesting ▫Packaging ▫Sorting ▫Sales and Marketing Customer: Job – Crops ▫Vegetables ▫Chickens ▫Flowers Tip: Use the same categories as your classes and/or revenue streams.

12. Fixing Transgressions

13. Quick Fixes Reconcile Your Bank Statement ▫Trust the bank balance according to QB ▫Enter missed receipts and expenses Adjust the Chart of Accounts Year-End Adjusting Entries ▫Get the Balance Sheet Right ▫Capture all expenses

14. General Journal Entries  Double Entry Accounting  Debits and Credits; Debits = Credits  Moving “money” from one account to another  Create a transaction when no money moves. Assets: “Assets are Ass-Backwards” Credits decrease the value, Debits increase the value Liabilities and Equity (Income and Expense count as Equity) Credits increase the value, Debits decrease the value

15. Make General Journal Entries

16. Loan Repayments

17. Loan Repayments: Ideal

18. Loan Repayments: Realistic Create Year-End Adjusting Transaction ▫Better tracking on balance sheet of loan balances ▫Better tracking of expense on income statement ▫Ensure lower tax payments

19. Loan Repayment: Adjusting Entry  Get Year End Summary from Bank: -Principal Repayment -Interest Payment

20. Depreciation: Adjusting Entry  Get Year End Depreciation from Accountant

21. Questions

22. Report: Profit & Loss Statement > Reports > Company & Financials > Profit & Loss Standard

23. Classes – Create Mini-Profit and Loss IncomeTotalEggsProduceMeat Birds Flowers Wholesale1,4004001,000 CSA1,700300600 200 Farmers Market1,9004001,200300 Farm-Stand2,6006005001,200300 Total7,6001,7003,3001,800800 ExpensesEggsProduceMeat Birds Flowers Supplies401015 Seeds15010050 Feed350200150 Processing200 Packaging500100200100 Total1,240310315465150 Channel Profit6,3601,3902,9851,335650 IncomeTotal Wholesale1,400 CSA1,700 Farmers Market1,900 Farm-Stand2,600 Total7,600 Expenses Supplies40 Seeds150 Feed350 Processing200 Packaging500 Total1,240 Net Profit6,360

24. Report: Profit & Loss Statement > Reports > Company & Financials > Profit & Loss Standard Customize:  Add Column for Classes

25. Report: Time By Job Summary Reports > Jobs, Time and Mileage > Time By Job Summary Customize Report: Display time grouped by: -Time by Job Only -Time by Job by Item

26. Questions?

27. Report: Balance Sheet When to use: Provide to potential lenders To understand the changes of your business Understand changes in cash Key Features: A snapshot in time, usually at the end of the fiscal year or month It shows who has claims to your assets – whether it is you/your business or someone else.

28. Balance Sheet – Example #1

29. Where’d the Money Go? Your business is profitable, but cash is tight.

30. Balance Sheet – Example #2

31. Projections Report: Profit and Loss Summary Customize Report

32. Projections: Looking Back to Look Forward How did sales grow in the past? ▫Can you maintain that pace? Which expenses are variable? ▫Will you become more efficient? Which expenses where fixed? ▫Will they stay the same in the future?

33. Thank you! More Resources: http://www.juliashanks.com/tools-for-entrepreneurs/ Email: julia@juliashanks.com Call: 617-945-8718

34. Flower Sales CSA Sales Farm-Stand Honey Meat Birds Egg Sales Farmers Markets Wholesale Produce Sales

35. Follow the Cash FlowersEggsVegetables Your Wallet or Cash Box FlowersEggsVegetables Farmers’ Market SalesFarm Store Sales Bank Cash Expenses Credit Card Fees Cash Credit Card Deposits

36. Step 1 Record Sales by channel and class

37. Step 2 Record cash used to pay expenses

38. Step 3 Note Credit Card (Merchant) Fees

39. Step 4 Deposit cash/credit card into bank account